Netflix gets its answer from Hotstar: Hotstar Premium

Hotstar is a leading OTT (Over-the-top) player in the digital space, owned by Star India group which has a bouquet of channels in over 8 languages in India. It took entire India to a storm in 2015, when it decided to telecast cricket matches on the platform, free for its users. Secondly, it made the platform very user-friendly in addition to aggressive advertisement of the platform, which made it gross a strong 55 million app user within months of its launch. But their monetization on the platform was from ads only; they decided to launch a premium feature for their users with exclusive premium content in the month of April 2016. In this place, we will discourse about how Hotstar evolved itself to become a premium content distributor.

Free and Paid OTT players are trying for the freemium model to get more audience.

Hotstar was launched by Novi Digital India Private Limited in February 2015, by pitching itself to be the exclusive broadcaster to telecast important cricket properties like ICC World Cup and IPL.

It stroke to various major points like “go solo” tagline (90% of homes in India have only one TV mostly controlled by daily soaps leaving youngsters without an option) and optimizing the site for even the slowest internet connection in India with 64 kbps speed.

Thanks to buffer content (shows from all channels on the Star Network) to initial rush given by the ICC World Cup and IPL on the platform, it succeeded to become a leading OTT player.

But still monetization was a problem as they were completely reliant on ads which are a threat by ad-blockers software installed in devices and to get advertisers on their platform they set terms in favor of these advertisers not benefitting the platform to get good revenues.

Users on Quora also spoke about their grievances of delay of live matches, lack of premium content, etc… which was studied well by the Star Network provoking them to launch their premium feature.

Hotstar was planned to be a premium content distributor during its launch itself….

Hotstar was launched with an initial motive of bringing all content from various channels on its network onto one digital platform where they would have complete control on its user’s needs and demands. Secondly, they can manage the ads themselves, not depending on an external source for generating revenues.

To get initial traction, they purchased exclusive digital rights for cricket matches (Cricket is a religion in India); for which the network invested heavily for less returns in order to get more loyal viewers on board. It is observed in India that people don’t delete apps after the purpose of its use is done (ex: If I don’t watch any shows on the Star Network, then I would delete the Hotstar app once the cricket season is done) so Star Network can continuously push notifications to their users on their phones.

John Nallen in an interview to televisionpost in March 2016 said that Hotstar has become a popular OTT player and its initial viewer engagement drive has become a success story, it has the potential to become a subscription based VoD platform (Video on Demand).

Star India has invested around $300 million into a loss-making sports business, which might be recovered from a premium model against an ad-supported free model (which will continue) having a threat from ad-blockers which have become a trend in most internet-enabled devices in the world.

Star India on December 2015 struck a deal with HBO (Home Box Office) for exclusive rights of premium shows from the HBO network, which was with Eros Now for a while ended in April 2015. This gave Star India access to various popular shows like Game of Thrones, True Detective, Veep, The Newsroom, etc… starting from January 2016. They started with telecast of these shows on Star World and Star World Premiere slowly moving it on Hotstar.

Motivation of the network to quicken the process of making Hotstar into a premium content distributor

Every bit I constantly speak in my posts that motivation is like the spark in the lighter to drive any commercial enterprise to its maximum voltage. In this case Netflix did the job.

With OTT players like ditto TV which gives live streaming of TV shows and Eros Now boasts largest content library of Hindi Movies both priced at Rs 49/mo; Hotstar developed the initial lust that OTT players with premium Hindi content are successful. Only they held the fear that whether English shows would also succeeded or not because most of the Indian English show viewers do so from torrent sites due to deficiency of original streaming sites unlike in the US.

English shows are mostly targeted to the today’s youth in India

Come January 2016, Netflix launched subscription-based premium English content in 129 countries in the globe. Pricing of the basic pack at Rs 500/mo on various devices, it received a phenomenal response from Indian users motivating Hotstar to launch such a service.

Hotstar Premium

In the second half of April 2016, it drove most of the Game of Thrones fans crazy by declaring that it would stream the sixth installment of the show ‘Minutes after America’ that too ‘Unspoiled’ which means uncensored which would be telecasted on 26th April 2016 on national television (Star World Premiere HD). On top of that, it also gives the premium users access to over 30 shows (and counting) from the HBO Original’s library.

Hotstar Premium is a hub of various high quality content for its subscribers.

Game of Thrones being the most pirated show in the country, Hotstar found it to be the potential driver for its premium feature like ICC World Cup and IPL did for the Hotstar platform in 2015.

Secondly, it is priced at Rs 199/mo which is more than Eros International’s Rs 49/mo but less than Netflix’s Rs 500/mo.

What are the shows and movies Hotstar offers for its premium users at Rs 199/mo

For a price of Rs 199/mo, Hotstar is one of the lowest priced OTT players for the quality and quantity of content it provides.

All seasons of the following shows are available on Hotstar

List of shows on Hotstar Premium from a library of HBO Originals and Star World Premiere

Why Hotstar has the potential to become successful over other paid OTT players

I really don’t know how many people believe in my theory, but in India, young generation learns English by watching TV shows. Even in tier-I cities where speaking English frequently is bleak, they learn English through these shows. But due to inaccessible fast internet speeds, their sources to these shows are limited (rarely to some torrent links as most files if anyone has downloaded is shared with all).

This is what Netflix wanted to tap. So they launched their packs with a minimum price of Rs 500/mo which is almost equal to US price of $7.99/mo. They launched three packs which has a difference of 1, 2, 4 screens at a time feature difference and HD/Ultra HD features for its customers for different prices.

In a country like India, where people struggle to get good Internet speed; 3G speed is very low compared to other nations; with less footprint of 3G and high prices, 2G is opted in, which a downloaded Whatsapp video is great, HD is a distant dream and Ultra HD is impossible on major broadband services in India; Netflix being priced higher and demands minimum connection speed to load its videos offered in minimum quality, adoption by the semi urban cities is very low. In short, targeted to premium audiences in major metros in India.

Hotstar on the other hand is priced at just Rs 199/mo, has a player optimized to work on India’s slowest internet speed (i.e. 64 kbps on a consistent 2G network). Actually, its optimization to this low speed was the main reason for its instant success in 2015 to stream live matches on the slowest 2G network. Hotstar gives HD viewing for all its premium users at the same price of Rs 199/mo. Thus we can say Hotstar follows the policy of “One Nation, No Discrimination”.

Netflix V/s Hotstar

On the other hand, it has launched the premium service during the IPL season, which is expected to get a good viewership on its platform, thereby a large audience to target their premium content to the consumers plus advertisement on various leading online portals and TV channels on the Star Network is expected to do the job for Hotstar.

Hotstar is advertised on all online platforms to target the today’s youth

Secondly, it is expected and promised to deliver live sports of various sporting properties it owns digital rights like cricket, kabbadi, etc… without any delay of 5 minutes as experienced by Hotstar viewers on the platform. This feature will get more people to sign up for premium content model; thereby the users get more than live sports on Hotstar which can be used as an initial traction gainer to get users addicted to premium excellent content thereby keeping people registered on the platform for long. It would be a Long Time Evolution for the user to become a loyal consumer, this is a task for Hotstar to continuously keep its users refreshed with new shows and addition of seasons to existing shows to keep their tagline ‘Minutes after America’.

I hope you liked my post. I really wish Hotstar becomes successful as a premium content distributor like it achieved a successful feat in 2015.

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